Tuesday, May 26, 2009

the whiskey diaries

By Jason Overdorf - GlobalPost

May 26, 2009 06:28 ET

NEW DELHI — A funny thing happened while Scottish whiskey makers were fighting to pry open India's tightly controlled, protectionist liquor market: A mass market Indian booze maker in Bangalore decided to develop its own premium, small-batch single malt — and launch it worldwide.

What's more, the stuff is pretty darned good.

Indian owned and operated Amrut Distilleries has been distilling malt whiskey since the early 1980s, because India's excise laws prevented it from sourcing it abroad, and the company needed malt to mix with molasses-based alcohol to produce what's known in the trade as “Indian whiskey.”

As Indian consumers grew more sophisticated, though, the company started aging its malts longer and longer. And then one day, the patriarch of the family-owned business, chairman Neelakanta Rao Jagdale, pulled the trigger. “It was around '98 or '99, when we had enough [quantity] of matured malt whisky, that we thought, 'Why can't we look at the possibility of producing our own single malt?'” Jagdale said in a telephone interview with GlobalPost.

Drawing on the expertise of Scottish consultants and a large network of professional tasters, the company spent the next four years developing its first single malt, and another two years developing a marketing plan. The first bottles hit shelves in the United Kingdom in 2004 with little fanfare. But over time, the Indian distillery — which produces nearly a million cases of mid-range Indian whiskey for every case of single malt — has slowly been collecting accolades. So far, it has won silver and bronze medals at the International Wine and Spirits Competition, at the Wine & Spirits Magazine International Spirits Challenge, and last year its Blackadder single malt was awarded the top prize in the sub-50 euros categories by Malt Maniacs.

Frankly, nobody was more surprised than the Indians. “Being an Indian and having tasted only molasses-based Indian whiskies for decades, you normally scoff when somebody says that India has produced a decent dram,” said Krishna Nukala, a Hyderabad resident who has rated more than 1,000 single malts from Scotland, Japan and other countries as a member of Malt Maniacs. “[But] Amrut's whiskey is as good as any SMSW (single malt Scotch whiskey) that is produced any where in the world.”

And like Japanese Scotch makers, Amrut is succeeding. “Currently we are selling in the UK, where we have our global office, as well as in France, Germany, Belgium, a little bit of Italy and Holland as well,” Jagdale said. “The only major market that we have yet to enter is the United States.”And India.

It may sound weird, but Amrut's single malts are only for export. That's because India has to be the strangest liquor market in the world. Due in part to the famous “Patiala peg” (the frightening large serving favored in the Punjab), India is the globe's biggest whiskey consumer — downing about 90 million cases a year. But that doesn't mean it always goes down smooth. Thanks to Gandhi's ideas on prohibition, booze is banned in Gujarat and attracts punitive taxes in other states. The sugar lobby has ensured that traditional tipples (a.k.a. “country liquor”) remain illegal. And though the premium market segment is growing fast, ludicrously high taxes on imported spirits still ensure that so-called Indian-Made Foreign Liquor — the locally produced, molasses-based, artificially flavored versions of vodka, gin and whiskey known in these parts as IMFL — remains the unrivaled king of the hill.

Now, that looks set to change. Scotch exports to India rose 19 percent to a value of £7 million in 2008, according to Scotch Whiskey Association estimates, even though genuine Scotch made up less than 1 percent of India's spirits market and the association has approached the European Union about making an official complaint to the World Trade Organization over India's prohibitive taxes. Single malts, too, are on the rise. Forecasting near 50 percent growth rates in single malt consumption, Bacardi launched Dewar's White Lable, Dewar's 12, Dewar’s Signature, Aberfeldy 12 and Aberfeldy 21 in India last year, and there's plenty of competition.

“There's a lot of room for growth, because the alcohol industry itself is changing from lower quality spirits and country liquor to higher quality alcohols,” said Jagdale, who also revealed that Amrut plans to start selling its own single malts in India by the beginning of next year.

That said, the jury is still out on whether Amrut will be able to call its single malts and other whiskeys “Scotch.” Last year, under pressure from the Scotch Whiskey Association, China agreed to prohibit any whiskey makers whose products are made outside of Scotland from calling their beverages Scotch, and a similar campaign is underway in India — which might be more amenable to the Scots' argument if its own claims on Basmati rice had been successful.

But to Jagdale, a malt by any other name, if it's a top-quality one that is, would smell as sweet.

“We are in the position to make high-quality malt whiskey which is equal and comparable to any malt whiskey in the world today,” he said. “Having been in the business so long — I am the second generation, and my son is the third generation — there is a bit of satisfaction that we all feel. I feel very happy that we are able to be in that class.”